How to Guide for Buying a House in 2023! [Beginner]

The process of buying a house is very overwhelming for those who haven’t gone through it. There are so many steps you have to take in order to get started. In this ultimate beginner’s guide to buying a house in 2023, I will walk you through the details you need to know before diving in and getting practical experience to help you take action.

Buying your first home is a major milestone and it can be a challenging and confusing experience from the initial search to the final inspection many steps are necessary to ensure you get your dream house without running into financial distress later it is not easy to purchase a home these days there is so much involved in the process that you have to be prepared

For anything from understanding the market to thinking about what neighborhood you will live in and how much you can afford there are so many factors that go into buying a house if you’re in the market for one here are the most important things you should know to be prepared and ready for the purchase when the time comes the first thing to do when you want to buy

A house is to figure out how much you can afford start by looking at how much the mortgage company would let you borrow you can do this by applying to a bank a credit union or an online lender and ask them what kind of mortgage product they offer and what you can get approved for assuming that this is your first time buying a house the size of your down payment

As well as the interest rate you pay will determine many of the mortgage options available to you here’s a rundown of the different types of mortgages that are available fixed rate mortgages is a type of loan that has a fixed interest rate over the whole duration of the term which is usually for a period of 15 or 30 years with this type of mortgage you know exactly

How much you pay every single month adjustable rate mortgages or arm this type of loan allows your interest rate to change over time usually every six months this means that your monthly payment can go up or down based on market conditions the most popular one is the fixed rate loan because it provides protection against inflation and it’s very easy to understand

For example last year i managed to get a 30-year fixed rate mortgage at a 2.25 interest rate this means that other than my property taxes and my home owner insurance my mortgage payment will essentially be the same every single month over the span of the next 30 years and my interest won’t change even though the rate is right now at over seven percent with the

Recent rate hikes the most common 30-year fixed rate mortgage loans are conventional loans which require you to put at least 20 down if you don’t want to pay a monthly mortgage premium there are also government-backed mortgage loans such as fha and va loans with fha loan you can put as little as 3.5 percent down and it doesn’t require you to have the best credit

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Score it gives you more financial flexibility but the inspection requirements are pretty strict the house needs to be in great condition meaning that if there is peeling pain stairs with no handrails or mold most likely it won’t qualify for this government-backed loans unless you can negotiate the fixes into the purchase agreement and have the seller fix all this

Issue use before closing va loans are loans that are available for military service members or veterans and eligible spouses this is similar to the fha loan with very strict inspection requirements for those who are eligible they can put zero percent down meaning that the lender will finance 100 of the purchase price essentially costing you only the closing costs

Upfront and that’s it we actually got the 30-year fixed va loan at 2.2 percent interest rate with zero percent down for the property i mentioned before all right now that you know a little bit more about mortgages you want to know how much you will be able to get pre-approved for based on your debt to income ratio the debt to income ratio or dti is the amount of

Monthly debt a person has compared to their monthly income basically how much of your current income is going towards debt every month in the perspective of the lender the higher the debt to income ratio the more risk a person has for not being able to pay back their mortgage mortgage pre-approval usually require at least a 43 percent of total income to go towards

Housing and other related bills in order to qualify for a mortgage if you’re married you can also ask for a joint mortgage pre-approval amount where they will include your spouse debt and income as well the important thing to know about joint mortgage is that if you’re planning to invest in real estate in the long run you actually want to get approved on your own

Because it would give you and your spouse more options in the future to purchase more real estate for example if you have a joint mortgage and your mortgage is two thousand dollar per month that two thousand dollar per month is going to show up as a debt under your name and also under your spouse name so next time you apply for a mortgage or another kind of loan

By yourself those two thousand dollars is going to show up in your debt it’s not going to be split by half the entire amount is going to be that under your name so it would make it harder for you to get other loans if your debt to income ratio is too high now imagine that the mortgage is only under your spouse name and he’s paying two thousand dollars every single

Month that’s going to be a debt to income ratio that is only affecting him and not you so for your next property you want to do it under your name for example because your debt to income ratio is probably way lower because the two thousand dollar did not apply to you because it’s not a joint mortgage another important financial tip that should be pretty obvious is

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To not buy something you cannot sustain financially in the long run you don’t want to spend the next 30 years mostly making just enough to pay off your mortgage and be house poor this is all you need to know for now about finances you will definitely dive deeper once you start talking with lenders as it is their job to explain their product to you so make sure you

Ask them questions i’m not a financial advisor so these are not professional advice these are mainly things that i’ve seen and i’ve learned throughout the years by investing in real estate the next important factor is to find a compatible real estate agent a real estate agent is one of the most essential person in your team when purchasing a home this agent would

Be your advocate who will work digitally to get you the best deal possible they will find property that meet your criteria your needs negotiate on your behalf and make sure that the entire process goes as smooth as possible if you work with an experienced agent you might be able to tap into their network and get recommendations on other lenders lawyers and also

Contractors as well make sure you interview several risk to agents and go to open houses with them listen to their opinion about the houses you see and figure out who’s the one you will learn the most and get the most genuine opinion personally i went with an agent who was a real estate investor himself we connected a year before i started going into open houses we

Went to a few together and he pointed out a few things i should be aware of regarding the home location and condition as an investor next thing you want to do is to research and find three to five different towns you will want to live in assuming that you’re buying this house for yourself enough for an investment to gain insight into a neighborhood i use website

Like neighborhood scouts where i can find a median home prices demographics crime rate school rating unfortunately it isn’t a free service so if you don’t want to pay for it you can always search for each of this specific information using google you can also use redfin or trulia insight to get some of this information for each town you also want to consider the

Amenities and the time it takes to commute to work if you’re planning to have kids and live in your home long term definitely look into the public school system as well the next thing you want to do is to go to as many open houses as you can to learn what you can get it is okay to pick a few towns and go to open houses so you see what you could get for the price

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In each one you will quickly learn which are the ones you want to avoid and which are the ones you really want to live in i literally went to all the open houses i could find for multi-family home in the greater boston area and i wrote notes about each one of them even when i wasn’t interested in placing an offer and i saved this information so i can see how much

They sold for and get an idea of the market once you know how much house you can afford the type of lending option you have at your disposal and an understanding of the town and market around you it is time to write your criteria down share it with your real estate agent and start house hunting for real for example a waterfront single family would have an acre of

Land with a minimum of two bedrooms and two bathrooms with water and gas line connected to the city and no major repair required in the price range of 300 to 400k and having a commute that is no longer than an hour away from work during rush hour once you find a house that matches all your criteria you can place an offer it might take a few two tries before you

Finally get the house that you want during my first house hunt i submitted over five offers got one accepted but we back out after inspection and fell negotiation and finally close on another one in a better location your criteria will be different based on the ultimate purpose you have for your first property some of you might want a forever house others might

Want to live there for a few years and then move so you want to figure out what it is that you want and research the market you are in as an investor you get a little bit more complicated where you will want to also do an analysis on how much rent you could get per unit or room based on the location and also how much you will have to pay a monthly expenses such as

Utility repairs maintenance management and more the real learning happened when you put this five steps into action i spent two years reading a bunch of books listening to podcasts and doing analysis but i really felt like i started learning when i went to my first open house let me know in the comments if you find any of this information valuable and don’t hesitate

To ask if you got any questions give this video a thumbs up and subscribe if you haven’t yet thank you so much for watching and i will see you in the next one

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How to Guide for Buying a House in 2023! [Beginner] By Apprentice Diary